Charity Oxfam has released a huge report that lays bare the discrepancy between how much the world’s largest companies are profiting from the coronavirus pandemic and paying out to shareholders and key workers losing jobs across the globe.
According to the report, entitled Power, Profits and the Pandemic, 32 of some of the world’s largest companies saw profits jump by $109bn (£84.1bn) in 2020, while globally half a billion people are expected to be pushed into poverty by the economic fallout of the pandemic.
The report highlighted how the 25 most profitable global corporations in the S&P Global 100 Index are expected to pay shareholders over $378bn in 2020 — equivalent to 124% of their profits.
The top 100 stock market winners have added more than $3tn to their market value, the report found.
The report explains how certain sectors such as technology, pharmaceuticals and consumer goods have benefited from the pandemic due to increased demand for services.
The five tech giants Google (GOOG), Apple (AAPL), Facebook (FB), Amazon (AMZN), and Microsoft (MSFT) account for $46bn in excess profits during the pandemic, with Microsoft accounting for close to $19bn alone.
Amazon CEO Jeff Bezos has drawn attention over the increase in personal wealth as the online shopping mogul has benefited massively from the lockdown. In April, Bezos had increased his fortune by $24bn due to the jump in the company’s share price.
Bezos owns an 11% stake in the firm and the new boost to his wealth has taken his total fortune to $138bn, firmly establishing his place as the world's richest man.
The Oxfam report says that “Bezos could personally pay each of Amazon’s 876,000 employees a one-time $105,000 bonus today and still be as wealthy as he was at the beginning of the pandemic.”
Job losses and job creation
The charity points out that while the top 100 stock market winners have gained trillions during the pandemic, half a billion people are expected to be pushed into poverty due to COVID-19.
“This pandemic has exposed the sickness at the heart of the global economy, with companies prioritising profits over people. A fortunate few are cashing in on Covid while hundreds of millions of working people are left to struggle,” said Danny Sriskandarajah, Oxfam GB chief executive.
“It is barely believable that, in the middle of a pandemic, scarce resources are going overwhelmingly to the already super wealthy. The consequences are deadly serious for hundreds of millions of people who are hurting as their jobs disappear, their hours are cut, or their employers fail to put in place basic safety precautions.
“In these extraordinary times, those who have been fortunate enough to profit from the pandemic have a responsibility to contribute towards vital healthcare, social safety nets and measures to boost economic recovery.”
According to the International Labour Organisation (ILO), 400 million jobs have already been lost globally and an estimated 430 million small enterprises are at risk.
Job losses have disproportionately effected women as they are overrepresented in the sectors hardest hit by the pandemic.
According to the Oxfam data women account for 54% of job losses, despite constituting only 40% of the world’s work force. The unpaid work that often falls to women such as caring for family members has also increased, making it all the more difficult for women to balance work and family commitments.
However, some of the world’s largest companies that have increased their profits during the pandemic have been some of the largest growth drivers for the global labour market.
Amazon is creating 33,000 corporate and tech jobs in the US alone, plus 20,000 free career coaching sessions, in response to the increase in demand for its goods and services due to the pandemic. It is also adding 100,000 new businesses to its seller platform.
Here is the full table from Oxfam on the 32 companies it mentions: